Kenya School of Monetary Studies partners with NGO to develop cheap loans for farmers

US Ambassador to Kenya Robert Godec buy fruits during from Kariobangi South market in Nairobi on Wednesday in February 2017. PHOTO: FILE

A US-funded NGO has partnered with the Kenya School of Monetary Studies (KSMS) to develop affordable loan products for farmers.

The Nairobi-based Global Communities, which is supported by United States Department of Agriculture (USDA), said the partnership is aimed at enhancing the capacity of local banks, especially those in rural areas, to develop more facilities specific to farmers.

“The banking sector lends a much smaller share of their loan portfolios to agriculture, compared to agriculture’s share of the gross domestic product,” Global Communities said in a statement to Business Beat.

The statement added that most banks have tended to ignore the agricultural sector due to its associated risks, which are mostly driven by limited understanding of the dynamics of the sector. KSMS’ partnership with local banks is aimed at helping financial institutions see agribusiness as a viable sector, and through custom-made products, harness the opportunities in the sector.

Agriculture financing

Through the collaboration, KSMS and Global Communities are conducting trainings on agriculture finance for bank employees to increase their capacity to develop relevant and affordable credit products for farmers.